About a year ago or so, we noticed how emerging technologies and investment opportunities in China are becoming increasingly important for technology investors to stay on top of. There are about 1.3 billion reasons for that, but we’ll list a few here outside of the 10 ways the communist-cum-capitalist country is already beating the United States in technology: China has the world’s second-largest economy, with a middle class so big that it would count as the world’s third most populous country. Party leaders plan to make China No. 1 in the artificial intelligence race, with the public and private sectors investing billions of dollars into startups. It’s already the leader in the electric vehicle market. The biggest fintech company in the world, Ant Financial, is a homegrown product spun off from tech giant Alibaba (NYSE:BABA) that is worth about $150 billion following a $14 billion Series C in June. In comparison, U.S. rival PayPal (NASDAQ:PYPL) has a market cap of about $100 billion.
Of course, there is a dark, dystopian side to all this that even goes beyond using AI and facial recognition technologies by Chinese unicorn SenseTime and others to keep China’s 1.3 billion citizens
under constant surveillancesafe. By 2020, the so-called China Social Credit Score will go nationwide, a new type of credit rating where George Orwell meets Mastercard. Most of us in the United States are probably familiar with FICO credit scores, which lenders use to gauge a person’s creditworthiness based on things like payment history, number of accounts, and length of credit history. The China Social Credit Score will account for credit history but will also include stuff like online transactional habits, personal information, ability to honor an agreement and social network affiliations, according to the Brookings Institute. It’s the “new credit score” we’ve talked about before, but worse.
China Social Credit Score
In other words, the China Social Credit Score weighs your value to society. Those with good scores (with ranges similar to FICO scores) get perks better than double points for airline miles. Rule followers can get discounts on energy bills, rent stuff without deposits, and enjoy better banking interest rates, according to Business Insider. Citizens who don’t follow the rules—outstanding loans, jaywalking, smoking in public places—can expect a ding to their Social Credit Score. A low enough score can get you banned from buying train tickets, getting into certain hotels and attending Chinese operas (which actually counts as a perk).
If that’s not enough to get you to become a law-abiding citizen, there’s also a bit of peer pressure involved, as those with poor scores can affect the social credit ratings of others in their social media circles. Can you imagine this system in the United States? How many soap parties would it take before your buddy Rich stops throwing his cigarette butts in the street? You’re going to stop smoking now, aren’t you, Rich? Whack, whack, whack. On the plus side, New York City would be cleaner than Singapore. Or, more likely, society would devolve into a bartering system using subway rats and day-old slices of cheese pizza.
Marriage Between Life Score and Credit Score
But we digress. In an extract from Rachel Botsman’s book, Who Can You Trust? How Technology Brought Us Together and Why It Might Drive Us Apart, she notes that this marriage of “credit scoring into life scoring” isn’t limited to China. In 2015, the nosey folks at the U.S. Transportation Security Administration proposed expanding the PreCheck background checks to include social media records, location data and purchase history. We know companies are already mining big data with AI for finding actionable trends in the news and creating credit scores for hipsters with little credit.
However, China is a bit more unique. Its most recent Great Leap Forward in the 21st century found many skipping the transition from cash to plastic and jumping straight into the mobile digital economy. That has created a tech-savvy population of more than 750 million people, more than 95 percent of whom access the web via a mobile device, according to the Brookings Institute. And the majority of those people use payment and social media platforms created by two tech companies, Alibaba and Tencent (the Facebook of China).....MUCH MORE